A.M. No. CA-01-10-P - Floria vs. Sunga

In April 1985, Unimex Micro-Electronics GmBH (Respondent) shipped a 40-foot container along with 171 cartons containing Atari game computer cartridges, duplicators, expanders, remote controllers, parts, and accessories to Handyware Phils., Inc.
The shipment was transported by Don Tim Shipping Corporation with Evergreen Marine Corporation acting as shipping agent.
Upon arrival at the Port of Manila on July 9, 1985, Bureau of Customs (BOC) agents discovered discrepancies between the goods received and the details stated on the cargo manifest.

Due to the noted discrepancies, the BOC initiated seizure proceedings against Handyware.
A warrant of seizure and detention was issued, and on June 5, 1987, the Collector of Customs issued a default order against Handyware for failure to appear in the proceedings.
Following an ex parte hearing, the goods were forfeited in favor of the government.
On June 15, 1987, Unimex intervened in the seizure proceedings and was granted such intervention, although the default order against Handyware had already been declared final and executory.

Unimex filed a petition for review against the Commissioner of Customs before the Court of Tax Appeals (CTA) in CTA Case No. 4317.
On June 15, 1992, the CTA reversed the forfeiture decree by ordering the release of the shipment to Unimex, subject to the payment of applicable customs duties.
The CTA decision became final and executory on July 20, 1992.
Respondent’s counsel, however, did not secure a writ of execution and instead pursued separate claims for damages against the shipping agents, both of which were eventually dismissed.

On September 5, 2001, Unimex filed a petition for the revival of the June 15, 1992 CTA decision, seeking either the immediate release of its shipment by the BOC or, alternatively, monetary compensation equivalent to the shipment’s value plus damages.
The BOC Commissioner defaulted by failing to file an answer, and during the ex parte presentation, it was revealed that the shipment had been lost from the BOC warehouses.
On September 19, 2002, the CTA declared the original CTA decision unenforceable due to the loss of the goods, and ordered the BOC Commissioner to pay Unimex the commercial value of the shipment, adjusted to the prevailing exchange rate at the time of importation, subject to deduction of applicable taxes and duties, with payment taken from proceeds of seized goods.

Both the BOC Commissioner and Unimex filed respective motions for reconsideration regarding the CTA decision.
The BOC argued that the CTA improperly converted an action for specific performance into a money judgment, while Unimex contested the basis for the exchange rate used and demanded legal interest from an earlier date.
The CA consolidated the appeals (CA-G.R. SP Nos. 75359 and 75366) and on August 30, 2004, the CA dismissed the Commissioner’s appeal and granted that of Unimex.
The CA found that the BOC was liable for the loss of the goods and, in modifying the CTA decision, ruled that the liability be computed at the exchange rate prevailing at the time of actual payment, with legal interest applied from September 19, 2002 (6% p.a.), and thereafter 12% p.a. upon finality until full payment.
Subsequent motions for reconsideration by both parties in the CA led to an amended decision on November 30, 2004, which affirmed Unimex’s claim for payment in Euros and recalculated the legal interest to commence from June 15, 1987, at 6% p.a. until finality, then 12% p.a. upon finality.

The Republic of the Philippines, represented by the BOC Commissioner, petitioned for certiorari to nullify and set aside the CTA decision based on several grounds:

The improper modification of a final and executory judgment.
The doctrine of laches, or undue delay, purportedly barring the revival claim.
The imposition of legal interest, contesting the basis for such charges.
The issue that a monetary judgment or charge against government funds cannot be decreed without a corresponding appropriation and falls within the ambit of the state immunity doctrine.

Whether the CTA erred in modifying its June 15, 1992 decision—which had become final and executory—by converting the specific performance order into a money judgment due to the subsequent loss of the goods.
Whether the application of the doctrine of laches to bar Unimex’s petition for revival of the judgment is proper, considering the timeline and diligence of the respondent.
Whether the imposition of legal interest at 6% per annum (and subsequently 12% p.a. upon finality) is legally supportable given that the original judgment did not involve a monetary obligation warranting such interest.
Whether the state immunity doctrine shields the government (through the BOC Commissioner) against liability for the lost goods and the resulting monetary judgment, especially given the BOC’s alleged negligence.